The blue chip company Deloitte has warned that they calculate that motor insurance premiums in the UK are quite likely to fall over the next year. They presented statistics at their annual motor insurance seminar that showed that combined motor insurance premiums in 2012 were worth £13.1billion, down a little from 2011 when total premiums equalled £13.3billionn, according to an article published in Insurance Age.

According to Deloitte’s research, United Kingdom motor insurers posted a net combined ratio of 105% in 2012, a 1% improvement on 2011’s net combined ratio of 106%. Insurance partner at Deloitte, James Rakow commented: “Our survey indicates that the market at present is evenly split on whether premiums will rise or fall this year but the momentum is currently favouring reductions, which consumers will welcome.

“In the past, once the market starts lowering premiums it has been difficult to reverse the trend. Unlike the period before the start of the financial crisis when insurers could rely on investment returns to make up the difference, insurers will have to generate their profits from core underwriting or from additional income from selling features to policies such as breakdown cover and legal assistance.”

Deloitte did note that legal changes enacted on 1st April 2013 would reduce both the frequency and cost of bodily injury claims, which should theoretically improve profitability for UK motor insurers.

However, Deloitte cautioned that this was unlikely to happen in practice “as the industry continues its price cutting and passes the benefit of the changes to policyholders”. The gender laws affecting insurance premiums will also filter through where females and men cannot be charged differing premiums based on their sex and could have an impact on cheap van insurance and cheap learner driver insurance policies. A comment was not made on the impact of cheap public liability insurance.